This entrepreneur says he's created a weapon for sleepless parents with kids haunted by frightening bouts of night terror.

"It's like a terrible temper tantrum, but your child's asleep through the entire episode. And up until now, there has been no solution," said Varun Boriah.

Boriah told CNBC his solution is Lully, a start-up he co-founded with Dr. Andy Rink, a general surgeon.

Both were fellows at Stanford's medical device design entrepreneurship program. And, as it turned out, some of Rink's relatives had suffered from night terrors.

"We saw just how many parents and children were suffering from this very common sleep disorder and we wanted to design a safe and simple solution," Boriah said.

Put to bed

Source: Lully

The Lully Sleep Guardian goes under a mattress to help treat night terrors

Lully's first product is the Lully Sleep Guardian, a Bluetooth enabled device that parents plug in and slip under a child's mattress. Parents using the sleep guardian input their child's history of night terrors in the Lully app.

Once the system is up and running, the device will start "learning" the child's sleep patterns. The device uses a proprietary algorithm to determine the best moment to deliver a vibration just prior to a night terror episode. These vibrations interrupt the child's sleep cycle, and the company says this blocks night terror.

According to the Lully, parents start seeing results within the first week, and incidents are cut by nearly 80 percent after a month.

The company has two models of Sleep Guardian. A basic version retails for $129 and a model with additional features like access to sleep experts costs $199.

Tossing and turning

Nat Burgess, president of Corum Group, a firm involved with software mergers and acquisitions, questioned if Lully would require FDA approval.

According to Boriah, the device is not treating what the FDA would consider a medical condition, and therefore the agency does not recognize it as a medical device or a regulated product."

Lully isn't the only sleep monitoring device; competitors include Owlet Baby, Sproutling, Sleep Number Kids and Mimo. However, Boriah claims Lully is the only product programmed to combat night terrors.

New York Angels board member Alicia Syrett wondered what would prevent competitors from adding a similar feature to their products. Boriah told CNBC Lully has filed for U.S. and international patents.

"We do have a proprietary algorithm that's held as trade secret," he added.

According to Boriah, his team conducted a six-month clinical study at the Stanford Sleep Center, and said that Lully's 10,000 nights of testing with 15 test subjects is an advantage over competitors.

"In this study, the Lully Sleep Guardian was found to stop 8 out of 10 night terrors in children ages 2 to 9," he said.

Source: Lilly

Lully’s sleep system

Lully told CNBC his company has sold over 1,200 units, but the team would not disclose specifics regarding revenue or profitability. The start-up also plans to develop more products that will address other sleep disorders.

Headquartered in San Francisco, Lully has raised $2.2 million since its 2014 launch. The start-up is backed by Y Combinator, Stanford-StartX Fund, Two Sigma Ventures and Highway1.